Your marketing budget is an important part of reaching your business performance goals. Yes, more money invested in marketing generally means getting there faster – but only if you are doing the right things consistently, monitoring outcomes, and moving toward greater ROI.
Developing a marketing budget can call on many hard metrics, but that doesn’t mean it’s an exact science. Instead, it’s best to synthesize a full view of the business picture and then make your best estimate. You can update projections and goals as you go.
Let’s consider five important factors to keep in mind when setting your marketing budget:
1 Your Per-Channel Goals
All channels provide a different level of ROI. Factors like total customer value and time to conversion all need to be considered. Before you can allocate the right budget to any channel, you should review its past performance and set goals for its outcomes in the coming year.
2 The Competitive Landscape
Competition is a major factor in how much paid advertising costs will change over time. As your most important keywords become more competitive, it is harder to maintain visibility. Ask yourself: Do you need to budget more CPC funds or focus on conversion improvement?
Remarketing gives you the capability to target advanced customer segments. As you look at remarketing efforts, Days to Conversion is the highlight metric – the longer this takes, the more crucial remarketing is. Consider raising your bid on previous visitors’ searches.
4 Your Mobile Investment
The e-commerce world as a whole is moving more rapidly toward a mobile-first approach. By now, you should have a responsive Web presence that caters fully to mobile devices. Break out performance metrics by platform and ensure your budget reflects mobile growth and ROI.
5 Fixed Brand Building
Marketing expenses are variable and tend to focus on specific products, services, events, and other promotions. On the other hand, brand building is a more stable expense category involving your core message and characteristics. For market longevity, ensure brand building is represented in your budget.
For an Agile and Effective Marketing Budget, Analytics is Crucial
Managing your marketing budget comes down to embracing analytics. To make accurate projections of your marketing needs, it’s critical to understand past performance in the most granular way possible, both on a monthly and on a quarterly scale.